Mr. Ronald Perry reports
METANOR REPORTS NET INCOME OF $2 MILLION FOR THE QUARTER ENDED DECEMBER 31, 2016; RAISES GUIDANCE
Metanor Resources Inc. has released its financial and operating results for the quarter ended Dec. 31, 2016 (second quarter of fiscal 2017). This press release should be read in conjunction with Metanor's financial statements for the quarter ended Dec. 31, 2016, and related management's discussion and analysis; both of these documents can be found on the company's website or on SEDAR.
Second quarter fiscal 2017 highlights
Bachelor property:
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Gold production of 9,764 ounces in the second quarter;
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Gold sales of 10,430 ounces in the second quarter;
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Revenue of $15.9-million from gold sales in the second quarter at an average sale price of $1,522 per ounce sold ($1,141 (U.S.) per ounce);
- Cash cost (1) of $889 per ounce sold in the second quarter ($667 (U.S.) per ounce);
- Sustaining cost (2) of $1,075 per ounce sold in the second quarter ($806 (U.S.) per ounce);
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All-in cost (3) of $1,208 per ounce sold in the second quarter ($905 (U.S.) per ounce).
(1) The cash cost is composed of all costs related to the mineral extraction and processing, including royalties associated to the property, and byproduct credits.
(2) The sustaining cost is composed of the cash cost, and all costs related to sustain the existing operation, such as capital and exploration expenses at the existing mines, and the corporate administration cost.
(3) The all-in cost is composed of the sustaining cost, and all costs related to corporate exploration and evaluation.
(4) Exchange rate of 75 U.S. cents per $1 Canadian dollar used in U.S.-dollar calculations.
Barry property
During the quarter, the company filed a preliminary economic assessment (PEA) for the Barry property prepared by independent consultants Goldmind Geoservices Inc. The economic evaluation was based on the recently updated resource estimate for the Barry open pit (see the press release dated Sept. 22, 2017).
Highlights from the PEA include:
- Pretax net present value (at a 6-per-cent discount rate) of $53.5-million;
- Pretax internal rate of return of 198 per cent;
- After-tax net present value (at a 6-per-cent discount rate) of $25.9-million;
- After-tax internal rate of return of 94 per cent;
- Life-of-mine gold production of 193,457 ounces over nine years;
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Life-of-mine strip ratio of 2.17:1.
Financial highlights:
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The company reported net income of $1.99-million for the three months ended Dec. 31, 2016.
- The company had $3,093,255 in cash on Dec. 31, 2016.
Q2 2017 OPERATING AND FINANCIAL RESULTS
Operating and Quarter ended Six months ended
financial Dec. 31, Dec. 31, Dec. 31,
results 2016 2015 2016 2015
Operational
results
Tonnes milled
(tonnes) 61,790 54,426 124,764 110,874
Feed grade (g/t) 5.1 4.6 4.7 4.6
Mill recovery
rate 96.5% 96.7% 96.3% 96.6%
Ounces produced 9,764 7,774 18,163 15,834
Ounces sold 10,430 7,476 18,323 15,273
Underground
development
(metres) 999 1,768 2,116 3,362
Diamond drilling
(metres) 18,423 18,062 37,459 35,387
Financial
results
(in thousands
of dollars)
Gold sales $15,875 $10,179 $28,538 $20,920
Operating costs (8,908) (9,848) (17,431) (18,517)
Royalties (368) (216) (591) (432)
Depreciation and
depletion (3,289) (2,629) (5,989) (5,322)
Gross income
(loss) 3,310 (2,514) 4,526 (3,351)
Net income
(loss) 1,985 (3,765) 1,783 (5,781)
During the quarter, a higher feed grade resulted in more ounces sold and a reduction in operating costs, compared with the same quarter in 2015. The mine generated an operating income of $3.3-million which was reinvested into the exploration on the Bachelor, Moroy and Barry properties.
Outlook for the coming quarters
Metanor raised its production guidance for the year to a range of 30,000 ounces to 36,000 ounces of gold from 28,000 ounces to 33,000 ounces. Management anticipates that the feed grade for the upcoming quarter will be similar to that of the second quarter of fiscal 2017.
The company plans to publish a resource and reserve update for the Bachelor mine within the current quarter, ending March 31, 2017. Meanwhile, an underground drill program will continue over the coming months in order to test additional targets outside of the soon-to-be-reported reserve update.
At the Barry property, Metanor continues drilling within the Barry open pit in order to increase mineral resources and to convert inferred resources into the indicated category. The Barry open pit remains open in all directions, demonstrating potential to increase in size.
Qualified persons
Pascal Hamelin, PEng, vice-president of operations, is the qualified person under National Instrument 43-101, responsible for reviewing and approving the technical information contained in this news release.
We seek Safe Harbor.
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